Permits pile up as gas and oil activity rises

Critics worried that production will pollute Colorado’s air

Durango Herald | Ann Imse

Colorado’s gas and oil boom combined with a cash-strapped state government has caused a backlog of 1,800 pending air-pollution control permits for gas and oil equipment.

“It could have an impact on jobs,” said Doug Hock, spokesman for Encana, a major natural gas and oil producer.

Construction projects can be held up for a year waiting for the state health department to start reviewing an application.

The permits cover condensate tanks, dehydrators that take the liquid out of natural gas, valves and pumps on pipelines, compressors, engines, drill rigs and other equipment. The applications detail how much the equipment will pollute, and what control equipment will keep the contamination in check.

“Every company is affected,” said Tisha Schuller, president of the Colorado Oil and Gas Association. “If you don’t have a permit, you can’t construct.”

Encana and the industry association, however, credit Gov. John Hickenlooper’s administration for working to solve the problem. Six temporary engineers have been hired, and so far they have cut the backlog from a peak of 2,000 to 1,800, said Will Allison, director of the Colorado Air Pollution Control Division.

“The state has been really responsive,” Schuller said, not just adding staff but also helping companies learn the system to get the paperwork right the first time, she said.

But even those six additional engineers won’t be able to eliminate the backlog until the end of 2012, Allison said.

The backlog is the result of a 70 percent jump in applications, from 164 to 284 per month from 2008 to 2010. The division has told the Legislature it needs 20 permanent new staffers.

Meanwhile, Colorado is expecting a further surge in natural gas and oil exploration, particularly in the Niobrara shale area, which is centered on Weld County but reaches across Northern Colorado and south to Colorado Springs. Major players including Anadarko and Noble Energy have announced plans to spend billions of dollars on thousands of new wells in the Niobrara area. These plans were driven by large hits off wells that use relatively new horizontal drilling techniques to tap a thin, widespread layer of oil under Colorado.

All this new activity leads to concern that the state’s air pollution will worsen, especially ground-level ozone, which exacerbates asthma and bronchitis and can damage plant life.

Natural gas and oil operations are only one of many sources of ozone. They emit nitrogen oxides and volatile organic compounds (VOCs), which combine in sunlight to create ozone.

Allison said Colorado has made great progress on reducing most types of air pollution, and the state is compliant on federal limits – except for ozone in Denver and Fort Collins. He said the rules will keep pollution in check despite the boom in natural gas and oil .

“We have a good handle on it,” he said.

Allison credited a Colorado law that is switching a number of power plants from coal to natural gas. That strategy will cut tens of thousands of tons of pollutants from the air – and allow a growing economy to emit smaller amounts of pollutants from other sources, including natural-gas and oil facilities, he said.

But environmentalists like Jeremy Nichols of Wild Earth Guardians say the state isn’t being tough enough.

“They’re issuing all these permits and Denver is in violation,” he said.

Greeley, Rocky Mountain National Park, Aspen Park southwest of Denver, Colorado Springs and Manitou Springs all have experienced spikes over 75 parts per billion ozone in 2011 that didn’t qualify as violations.

“The science says we need to be doing a lot better” on limiting ozone to keep humans healthy, Nichols said.

The Obama Administration was expected to lower the standard to the 60-70 ppb range but has delayed that decision until 2013, he said. The issue could be decided by the outcome of the presidential election, he added.

To keep the sudden jump in drilling and production from exacerbating the state’s air pollution, companies must submit detailed applications for air-pollution permits.

“It’s a huge amount of work,” said Schuller.

New federal regulations due in February are expected to partly mirror Colorado’s laws but also extend the reach of the permitting process to additional sources of pollution, said Bruce Baizel, a Durango attorney for Earthworks Oil and Gas Accounting Project.